It has long been a general rule that richer countries have higher fuel prices. A while ago, we even wrote about the direct correlation between a country’s fuel price and the standard of living enjoyed by that country’s citizens.
Venezuela, for instance, has the lowest fuel price in the world – at only 12c a litre – but the country is also prone to high levels of crime, civil unrest, corruption and a shockingly poor health infrastructure.
When we look at some of the countries with the highest fuel prices, by contrast, we find the likes of the Netherlands, Norway, Hong Kong, Monaco, Iceland, etc. These places are, generally speaking, stable, advanced and well-organised.
Of course, every country has its own problems and the factors that contribute to the economy aren’t always the easiest to understand. When it comes to the fuel price, we have to take into account whether or not that country produces and sells oil, or what types of taxes and subsidies are in place. These factors play a major role in the retail prices of fuel.
As an example of an exemption to the general rule, our neighbour, Zimbabwe, currently has the highest petrol price in the world – at a monstrous R47.57 per litre – and the country isn’t exactly in good shape.
Beit Bridge – the busiest border crossing in Africa – has all but ground to a halt due to significantly increased cross-border traffic. This is thanks to a surge in people that are now purchasing fuel in South Africa and carrying it across the border to sell to Zimbabweans at lower that the regulated price. They still make a profit, and only once in a while do they accidentally set everything around them on fire.
The global average price for a litre of fuel is currently sitting at R15.87 – and South Africa isn’t too far off the mark. At least for now, anyway. The price of fuel is expected to rise again in May, for the fourth consecutive month.
Let’s take a look at how much we’ll be paying, and why.
Though the rand has been showing some signs of life in the last week, the price of global crude oil has risen enough to outweigh those benefits. The cost of international petroleum products (which South Africa imports) has risen so high that we’re seeing an under-recovery of around 55c per litre of petrol – meaning that it currently costs that much more to produce a litre of petrol than what we’re buying it at.
For that reason, and according to the latest mid-month data from the Central Energy Fund, motorists can expect another fuel price hike in May. Should the current conditions persist, we could be looking at paying around R16.68 per litre of 95-grade petrol and around R16.50 for 93-grade.
It wasn’t too long ago that the government announced that it would be looking into implementing a cap on the fuel price, but as yet, no word has emerged from the state.
According to a spokesperson from the Department of Energy, the fuel cap idea is still in the works and is being discussed – along with the idea of de-linking the RAF (Road Accident Fund) from the fuel price.
Until the department has come to a decision on the matter, however, all we can do is wait.